Senate Democrats to hold meaningless tax votes tomorrow

posted at 10:15 am on December 3, 2010 by Ed Morrissey

A deal between Democrats and Republicans in the Senate on the upcoming tax hikes apparently collapsed last night after one Republican withheld unanimous consent to proceed.  As a result, Democrats will hold two votes tomorrow on extending the current tax rates for middle-class workers, with one including workers making under $1 million per year.  The votes won’t survive a filibuster, but Democrats want to use the votes to paint the GOP as the party of the rich.  However, that strategy makes a lot less sense after the jobless report this morning:

Senate Majority Leader Harry Reid (D-Nev.) plans to schedule two votes on Saturday on Democratic plans to end Bush-era tax breaks for the nation’s highest income earners.

One plan sponsored by Senate Finance Committee Chairman Max Baucus (D-Mont.) would extend current tax rates only for families that earn less than $250,000. The second plan offered by Sen. Chuck Schumer (D-N.Y.) would extend tax rates only for families that earn less than $1 million.

The Senate will hold cloture votes on both of those measures Saturday to end Republican filibusters blocking them from floor consideration.

“Our priorities are very, very simple and direct,” Reid told reporters Thursday night. “One, we want to make sure the American people know we believe that tax cuts should be extended for people making less than $250,000 a year.

“And just to make sure the American people understand that we do not support giving tax cuts for millionaires and billionaires, we’re going to have a second vote on that,” Reid added.

This has to be the most unintentionally hilarious comment of the day:

Sen. Mark Udall (D-Colo.) said Democrats were getting tired of talking about taxes and itching to act.

Er, really?  Democrats have had two years to act on these expiring tax rates.  They had an opportunity to address the issue before the election, and adjourned instead, even though a clear majority in both chambers of Congress supported an across-the-board extension of the current tax rates.  The Democrats avoided acting out of fear of the midterm vote, and still wound up getting punished.

Last night, this defiant stand to protect a punitive tax hike on higher-income households may have looked courageous in a populist manner.   Now it just looks foolish in every fiscal sense.  The economy has gotten strangled, with unemployment jumping up to 9.8% and job creation shrinking again.  The massive government stimulus has done nothing to create momentum for growth, nor to convince investors to plunge into the murky waters.  Hiking taxes on their income will deter rather than encourage the kind of massive investment needed to create jobs and move economy into real growth.

It takes wealth and confidence put together in action to create economic growth.  Instead, Democrats want to punish income growth and sap confidence in the future, while stalling to build themselves the kind of populist credibility that led to a historic defeat in the midterms, all in relation to an issue they could have resolved months or years ago when they had the political momentum to dictate outcomes.  It’s a demonstration of impotence and pique, not a principled stand at all, especially since the outlines of the deal they’re cutting are already well known:

The negotiators have put together the outlines of a deal that would extend all of the Bush tax cuts for two years and extend federal unemployment benefits for a year, according to congressional sources. Democrats are also pushing for an extension of the Make Work Pay and college-tuition tax credits that were part of the 2009 economic stimulus package.

But Republicans have balked at the cost of the Make Work Pay and the college-tuition tax credits, which would cost an estimated $62 billion and $8 billion to extend for one year, according to GOP sources.

Democrats want a sequel to Porkulus?  No wonder the deal fell apart.  Perhaps it will be better to punt on this after all and wait for the GOP to take over the House to resolve the tax issue.  It will be a lot less expensive, at the very least.


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Sen. Mark Udall (D-Colo.) said Democrats were getting tired of talking about taxes and itching to act.

DC bedbugs instead?

ted c on December 3, 2010 at 10:19 AM

Pelosi and Reid secretly want the extensions to fail because they believe they can use this failure against Republicans. Pelosi has learned nothing. She continues with her political circus while the country slowly sinks beneath the waves.

NotCoach on December 3, 2010 at 10:20 AM

Harry-kari… the new reality show.

Yoop on December 3, 2010 at 10:22 AM

The votes won’t survive a filibuster, but Democrats want to use the votes to paint the GOP as the party of the rich.

I’d rather be the party of the rich than the party of perpetual welfare and unemployment.

MeatHeadinCA on December 3, 2010 at 10:24 AM

I am completely lost regarding what is going on in Congress at this time. I’ve got no idea what the Republicans are thinking or doing and I’ve got no idea what all these food bills are about and why Republicans are voting for them.

What’s up Republicans?

ncjetsfan on December 3, 2010 at 10:25 AM

Democrats have had two years to act on these expiring tax rates. They had an opportunity to address the issue before the election, and adjourned instead, even though a clear majority in both chambers of Congress supported an across-the-board extension of the current tax rates.

Moreover, for the last half of 2009, they could have done whatever they wanted with absolutely no Republican ability to stop them. If I didn’t know bett…wait a minute – I do know enough to say that the leadership didn’t want ANY of the Bush-era tax rates to continue into 2011.

steveegg on December 3, 2010 at 10:31 AM

What’s up Republicans?

ncjetsfan on December 3, 2010 at 10:25 AM

“We won. What else do you expect?”

/s

Yoop on December 3, 2010 at 10:32 AM

A gop congressman stopped the libs posturing on msdnc this am, paraphrasing-you can’t focus on who was in the wh during the economic boon times instead focus on who controlled congress….the lib was screeching how Clinton had better employment #s and the such over W time

cmsinaz on December 3, 2010 at 10:32 AM

If democrats punt on the tax issue, the stock market might crash.

So this is actually a pretty critical issue. I hope someone up in DC takes their blinders off and looks around at the rest of the country pretty damn quick.

Mord on December 3, 2010 at 10:35 AM

Example, I own my own business and have the following:
1) Take 100K of income
2) 100K of profit that I would like to reinvest.
3) Paid down 100K of principal on my buildings

To the government I have 300K of income and I am taxed as such. If my effective rate is 33%, I have to pay 100K of taxes. There goes my profit, and I have no money to reinvest in my business. Do you understand crr6 and your ilk???

WashJeff on December 3, 2010 at 10:38 AM

If democrats punt on the tax issue, the stock market might crash.

So this is actually a pretty critical issue. I hope someone up in DC takes their blinders off and looks around at the rest of the country pretty damn quick.

Mord on December 3, 2010 at 10:35 AM

You assume (and you should know what Assumption is the mother of) that they care to stop it.

steveegg on December 3, 2010 at 10:39 AM

WashJeff on December 3, 2010 at 10:38 AM

Too simple, Jeff. Law students and trolls don’t understand simple.

Yoop on December 3, 2010 at 10:42 AM

Mord on December 3, 2010 at 10:35 AM

You assume (and you should know what Assumption is the mother of) that they care to stop it.

steveegg on December 3, 2010 at 10:39 AM

But would the market recover once, and of course if, the GOP fixed it? I think the market would and may surpass current highs since it would show that the GOP can get Obama to heal.

WashJeff on December 3, 2010 at 10:45 AM

Republicans have ZERO reasons to compromise.
They don’t have to give an inch… not one.

It’s not Republicans who are going to be in the soup come January. It’s Barack Obama who has to face angry taxpayers. He’s had two years to see to this and has failed to do it. Like it or lump it… it’s Presidents who get all the glory when things go right, and all the blame when they don’t.

Democrats can either sign now, or wait until January when House Republicans force them to. They’re out of their minds if they think the Senate is going to stick its neck out over raising taxes in a stagnant economy.

This is all just posturing and EVERYBODY knows it.

Murf76 on December 3, 2010 at 10:46 AM

These guys are completely clueless as to what happened back on Election Day!

They just do not get it!

pilamaye on December 3, 2010 at 10:49 AM

The GOP cannot cave on creating a Millionaires bracket. Once created, getting rid of that will be nearly impossible. Keep fight for lower tax rates, ideally one rate, and a broad base.

WashJeff on December 3, 2010 at 10:49 AM

“Our priorities are very, very simple and direct,” Reid told reporters Thursday night. “One, we want to make sure the American people know we believe that tax cuts should be extended for people making less than $250,000 a year.

Guess what Harry, did you know that the American people believe you are wrong?

Did you know that the American people rejected your agenda on Nov. 2nd?

Did you know that the American people no longer care what you or your party believes?

Did you know that the American people aren’t falling for the liberal mantra of “tax cuts for the rich”?

Did you know that the American people know that “the rich” really do pay more than their fair share?

Believe it Harry.

Perhaps it will be better to punt on this after all and wait for the GOP to take over the House to resolve the tax issue. It will be a lot less expensive, at the very least.

With all the political games the Democrats are playing, (in their last gasp at “leadership”), while this nation is mired in jobless disparity, I firmly believe you’re right Ed.

Rovin on December 3, 2010 at 10:52 AM

WashJeff on December 3, 2010 at 10:38 AM

Best of luck to you WashJeff, and thanks for being a small businessman. (My dad was one too, so I’ve seen the pain & anxiety, especially during the Carter years.)

It takes money to make money. Or more accurately, it takes wealth to create more wealth and embiggen the wealth pie.

rbj on December 3, 2010 at 10:53 AM

One would have thought that the Political Massacre on November 2nd would have gotten their attention. However, judging from their actions since they got back to work Monday, this oblivious pack of political scavengers seem bound and determined to gnaw as much meat off of the bones of the American Dream as they can before the Big Dog of American Conservatism returns to Washington in January.

kingsjester on December 3, 2010 at 10:55 AM

As long as everything this congress does for the remained of its session is meaningless I’ll be happy. They’ve done enough for (to) us this year. Call it a session and head home early for the holidays. Really no one will complain.

Tommy_G on December 3, 2010 at 10:55 AM

kingsjester on December 3, 2010 at 10:55 AM

The problem is that the Liberal Democrats are not willing to part with their meme of being for the “small guy”!..They have ran on this since I can remember..As John Boehner said yesterday it is all about the left pandering to their base!..:)

Dire Straits on December 3, 2010 at 11:05 AM

It is not the “govment’s” money!!!

All the dems do is urge/foment class warfare and yet they have more millionairs contributing to them than to the pubs. Why?
As far as the 3 richest men who are crying to be taxed more – send the cheques! No one has to tax you more – give it as a donation and a write off.
THANKS NEVADA FOR THE MOST OBNOXIOUS, (I CAN’T THINK OF ANY OTHER NICE NAMES FOR HIM)SENATOR – HARRY REID. You will surely not get any of my business as I drive back and forth to CA, will drive right through your state.

Bambi on December 3, 2010 at 11:09 AM

The massive government stimulus has done nothing to create momentum for growth, nor to convince investors to plunge into the murky waters

Ed, the CBO and Wall Street models have estimated the stimulus saved – created millions of jobs and added several basis points to the GDP. Without it, unemployment would be far higher and consumer sentiment would be far lower. You couldn’t be more wrong about the impact of the stimulus.

Because you’re absolutely certain that more stimulus is a bad idea, the country is about to find out how far the economy can sink when you cut off deficit spending in the middle of a deep recession. People need to prepare for a double dip recession, with the second dip far more severe than the first. In the absence of public spending, which the Tea Party believe will result in lower deficits, the deficit will actually increase as the tax base falls even further off the cliff.

bayam on December 3, 2010 at 11:10 AM

Reid is an absolute freaking idiot and is guiding the country to its destruction.

rplat on December 3, 2010 at 11:12 AM

Example, I own my own business and have the following:
1) Take 100K of income
2) 100K of profit that I would like to reinvest.
3) Paid down 100K of principal on my buildings

To the government I have 300K of income and I am taxed as such. If my effective rate is 33%, I have to pay 100K of taxes. There goes my profit, and I have no money to reinvest in my business. Do you understand crr6 and your ilk???

WashJeff on December 3, 2010 at 10:38 AM

By their very nature, liberals don’t understand business. If they did they would be conservatives.

In the future we need to clear up the small business IRS reporting methods, perhaps by inventing a new form to break out small businesses from those simply working for someone else. That may be the only way to educate the liberals.

slickwillie2001 on December 3, 2010 at 11:24 AM

But would the market recover once, and of course if, the GOP fixed it? I think the market would and may surpass current highs since it would show that the GOP can get Obama to heal.

WashJeff on December 3, 2010 at 10:45 AM

In the next two-year window, I see a VERY uneven recovery, with what recovery there is where Republicans control the state-level levers of power. We will get gridlock on the federal level the next 2 years (and that’s if we’re lucky).

steveegg on December 3, 2010 at 11:33 AM

A little OT – the headline says that the deficit vote failed, but the article says the commission passed the plan 11-7 (although 14 votes short of what they need to force the congress to act) Did I read it wrong?

LASue on December 3, 2010 at 11:41 AM

I really hope that the tax hike happens across the board.

THe sight of pitchforks, torches and unwashed lederhosen in late January will bring a tear to my jaded eye.

Sinner on December 3, 2010 at 11:43 AM

Bayam, the recession officially ended in June of 2009.

The “recovery” hasn’t even kept pace with the number of people entering the job market, and the growth has been anemic, at best.

I call this a depression. The stimulus has manifestly failed too avoid this, to keep unemployment below even 9%.

The countries that didn’t try stimulating their economies have fared better than we have.

Historical analysis show that Federal revenues don’t get above ~10% of GDP, no matter what is done to the top rates, so letting the Bush cuts expire won’t increase Federal revenues, but will hurt the economy.

Research also shows that, contrary to Keynes theory, the multiplier effect of government spending is below one. People treat temporary tax cuts and rebates as “found money” and usually save it. Only permanent or long term tax cuts actually have a multiplier above one.

The economy is also suffering from the fact that the toxic assets of sub-prime and alt-a mortgages aren’t being cleaned up, indeed, are still being produced. And the tremendous uncertainty from the impending regulations to come from Health, the EPA, etc.

LarryD on December 3, 2010 at 11:44 AM

Dang it, no edit

~10% ~19% of GDP

LarryD on December 3, 2010 at 11:45 AM

In the future we need to clear up the small business IRS reporting methods, perhaps by inventing a new form to break out small businesses from those simply working for someone else. That may be the only way to educate the liberals.

slickwillie2001 on December 3, 2010 at 11:24 AM

Yes, I like this idea. At the very least, it would force the progressives to openly target small business.

LarryD on December 3, 2010 at 11:48 AM

Couldn’t they pass the Bush tax cuts next year and make it retroactive to beginning of the year? Just wonderin…

tims472 on December 3, 2010 at 11:59 AM

Senators should use every vehicle they can to stall these meaningless votes. The more wrenches in the works, the less time left in the lame duck.

Offer a boatload of amendments.

Use the maximum amount of debate time.

Scour the rules book for other ways to gum up the process.

It is important that this “lame duck” session be LAME.

astuddis on December 3, 2010 at 12:04 PM

Ed:

Democrats have had two years to act on these expiring tax rates.

They have had four years, not just two.

They have really had, what, ten years? You give them far too much credit.

Troll Feeder on December 3, 2010 at 1:58 PM

This is shameful. Every business owner I know has no idea where their business is headed, and can not forecast. Typical of politicians who have never had to make a payroll and they could careless about the citizens. Narcissism at its best.

Wade on December 3, 2010 at 2:18 PM

bayam on December 3, 2010 at 11:10 AM

Troll patrol!!!!!!!!!

flytier on December 3, 2010 at 4:02 PM